An increase in Depreciation will contribute to higher Cash Flow from Operating Activitiestruefalse
Question
An increase in Depreciation will contribute to higher Cash Flow from Operating Activitiestruefalse
Solution
True. Depreciation is a non-cash expense that reduces a company's earnings but does not involve any actual cash outflow. Therefore, while it reduces a company's net income on the income statement, it is added back to net income in the cash flow from operating activities section of the cash flow statement, thereby increasing operating cash flow.
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